Dotcom Urges U.S. Judge to Dismiss Copyright Charges

Jan. 30 (Bloomberg) -- Megaupload.com, the file-sharing
website that was shut down last year on copyright infringement
charges, urged a U.S. judge to throw out the indictment to make
up for what it called a lack of “due process” in the case.

The U.S. Justice Department failed to give the company
legal notice that it was charged, froze its assets and left
servers containing content owned by customers “gathering dust
and in danger of deteriorating,” Megaupload’s lawyer Ira
Rothken wrote in a filing in federal court in Alexandria,
Virginia, yesterday.

“More than a year has now passed since Megaupload was
branded a criminal, with no opportunity to date to clear its
name or challenge the charges against it,” Rothken wrote. The
government’s conduct in the case raises “grave questions about
whether the government is intent on being judge, jury,
executioner and asset collector,” he wrote.

Kim Dotcom, the founder of Megaupload, was indicted in what
was dubbed a “mega conspiracy” by U.S. prosecutors, who
accused his website of generating more than $175 million in
criminal proceeds from the exchange of pirated film, music, book
and software files. On Jan. 20, Dotcom began running a successor
website called Mega from his home in New Zealand.

The U.S. is seeking Dotcom’s extradition, with a hearing
scheduled for August in Auckland.

Peter Carr, a spokesman for U.S. Attorney Neil H. MacBride,
referred questions about the seizures of the websites and
Dotcom’s assets to the government’s court filings.

Preventing Redirection

In a Jan. 13 affidavit, referred to by Carr, an
investigator whose name is blacked out in the document cited a
U.S. law that allows seizure of property when an injuction
wouldn’t guarantee the property would be available for seizure
upon conviction.

The domain names had to be seized to prevent Megaupload’s
supporters, or others, from redirecting content to servers
elsewhere in the world, the investigator said. Injunctions
wouldn’t prevent that, according to the investigator.

The U.S. won the court order and shut down Megaupload.com
without notice after the charges against seven individuals,
including Dotcom, were unsealed in federal court in Alexandria
on Jan. 19, 2012.

The U.S. Justice Department seized Dotcom’s bank accounts.
At the same time, New Zealand police, following a helicopter-led
raid on Dotcom’s mansion, seized 18 cars, computers and files.
Dotcom spent a month in jail before winning his release on bail.

New Website

Mega, like its predecessor, lets users upload, download and
share files, competing with sites such as Dropbox.com and Google
Inc.’s Youtube.com, Dotcom said when introducing the new website
this month. Unlike the rival sites, Mega allows file encryption
through an Internet browser with the user having the only key to
unlock the file, preventing governments and storage providers
from viewing the contents, he said at the time.

Rothken, in the latest filing, urged the judge to dismiss
the indictment until Megaupload is properly served with legal
papers outlining the charges, “thereby freeing the corporate
defendant from the criminal limbo that is presently subjecting
it to daily, irreparable harm.”

The New Zealand case is Between Kim Dotcom and Attorney
General. CIV2012-404-001928. High Court of New Zealand
(Auckland). The U.S. case is: USA v. Dotcom. 12-cr-00003. U.S.
District Court for the Eastern District of Virginia
(Alexandria).